U.S. Economist Krugman Wins Nobel Prize in Economics

The last of six 2008 Nobel Prizes was awarded Monday to Princeton University professor and New York Times columnist Paul Krugman for his research on free trade and globalization. Krugman discusses his research and theories with Jim Lehrer.

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JIM LEHRER:

And finally tonight, a conversation with Paul Krugman, winner of the 2008 Nobel Prize in Economics. He's a professor of economics at Princeton University, a columnist for the New York Times, and a frequent guest here on the NewsHour.

I spoke with him earlier today.

Paul Krugman, welcome and congratulations.

PAUL KRUGMAN, columnist, New York Times: Thank you. It's been an awesome day.

JIM LEHRER:

Yes, I bet it has. The Nobel Committee said the prize was for your theory on international trade. Explain that.

PAUL KRUGMAN:

Before the late 1970s, international trade was a theory about countries that are different. One country, you know, some place is tropical, another place is temperate, so the tropical country is going to produce coffee, the temperate place is going to produce wheat, and that was how you thought about international trade.

A lot of us were groping toward saying, you know, that's only part of the story. There's a lot of almost arbitrary specialization between countries. You know, somebody gets a head start. Somebody starts producing a product before someone else.

And then just the logic of specialization — once you've got — there are advantages to producing things on a large scale — lead to countries producing different things, lead to international trade.

And making sense of that, turning that into a clear story, something you could test against data, that's the kind of work that I did. That's really what the prize is about.